Implementing Cumulative Substantial Improvement and Substantial Damage Requirements
Many pre-FIRM (Flood Insurance Rate Map) buildings suffer from repetitive flood damage, yet often do not meet the NFIP's minimum 50 percent damage threshold required for substantial damage classification. To address this, communities can adopt a "cumulative substantial improvement" (cumulative SI) requirement. This approach mandates that all improvements and repairs are tracked over time and considered collectively for SI/SD determinations. This method accelerates compliance with flood damage-resistant standards, unlike the standard NFIP requirement that applies separately to each improvement or repair application.
Benefits of Cumulative SI/SD
A cumulative SI/SD requirement captures phased improvements and ensures that buildings in flood-prone areas achieve compliance with flood-resistant standards sooner. By revising the definition of "substantial improvement" to include a specified period for cumulative calculations, communities can effectively manage flood risks. For instance, the revised definition might state:
"Substantial improvement means any combination of repairs, reconstruction, rehabilitation, addition, or other improvement of a structure taking place during [insert period] the cost of which equals or exceeds fifty percent of the market value of the structure before the work is started."
This definition would encompass structures incurring substantial damage, irrespective of the actual repair work performed.
Tracking and Record Keeping
Effective implementation of cumulative SI/SD requires meticulous record-keeping. Communities need a reliable system for recording and accessing data on repairs and improvements. Each permit application must trigger a review of the building's cumulative records. This approach demands that communities retain records over the specified period.
Market Value Considerations
Since market values fluctuate, communities must decide how to handle these changes. One strategy is to determine the market value at each permit application and use this value in SI/SD computations, accumulating percentages or costs over the set period. Tables 5-1a and 5-1b illustrate how cumulative SI calculations can account for changes in market value over time.
Regulatory Implementation
Communities should ensure that their cumulative SI/SD regulations do not discourage general maintenance. While only permitted work counts towards cumulative SI, any project requiring a permit will include all associated work costs in the SI/SD determination. For example, repairing roof damage that involves replacing structural components and shingles would include the cost of re-shingling in the SI/SD calculation.
TBCF Summary
By adopting cumulative SI/SD requirements, communities can proactively reduce flood losses and enhance the resilience of their buildings. This method not only ensures quicker compliance with flood-resistant standards but also captures phased improvements, providing a comprehensive approach to floodplain management. For further guidance, communities can refer to the CRS Credit for Higher Regulatory Standards for detailed regulatory language and implementation strategies.
